Showcause notice issue: Vodafone Idea makes full payment to telecom department with interest

NEW DELHI: Vodafone Idea -- which had been issued a showcause notice by DoT over non-payment of licence fee in seven circles -- has now made full payment with interest, a source said. After receiving DoT's showcause notice dated April 7, Vodafone Idea (VIL) had recently said any payment not made on March 25, would be paid on April 15 with interest.

Sources aware of the company's position on the matter said full payments with interest have now been made to DoT. An e-mail sent to Vodafone Idea on the issue remained unanswered.

Earlier this month, the Department of Telecom (DoT) had issued a show-cause notice to VIL over non-payment of licence fee for the fourth quarter of FY2020-21 with regard to circles of Bihar, Gujarat, Jammu and Kashmir, Kerala, Maharashtra, Uttar Pradesh (East), Odisha, as well as national long distance.

As per the notice, DoT directed VIL to show cause by April 12, 2021 why action should not be taken against the company under relevant clauses of the licence agreement. "Failure to perform any obligation(s) under the licence including timely payment of licence fee and other charges due to licensor is breach of licence agreement as per the terms and conditions of the licence agreement," DoT had said in the notice.

In a regulatory filing on April 12, VIL said it will be sending a "suitable clarification" to the Telecom Department on the showcause notice. VIL had explained that payment of licence fee is a regular quarterly exercise based on self-calculation of revenue for each quarter.

Generally the payment is made on 15th day of the month following the quarter end, but in the fourth quarter an estimated payment is required by March 25.

However, the licence also allows the payment to be made with interest on April 15. "To the extent of any payment not made on March 25, will be paid on April 15 with interest," VIL had said then.